Slice of Pie - Cement

Sector Performance
India is the second largest producer of cement in the world with ~8% share in global cement production.
The cement industry is estimated to have added 33 million tonne of grinding capacity in fiscal 2022 and
over 15 mtpa of capacity commissioned in fiscal 2021. Further, robust capacity addition of over 27-29 MT is
expected in fiscal 2023. The total installed capacity is estimated to be around 710-720 MTPA by fiscal 2027,
with capacity utilisation of 67-69%.

Average Cement Price (Rs /50kg bag)

380
370 Sector Updates
360

370
369
350  Pan-India average cement price increased by ~2%

359
355
354
MoM in Oct’22 led by 2-5% price increase in

352
340

350
347

345

345
343
330

339
South, East and West markets.

334
331
331
320

341

323
310
300
 Cement manufacturers have announced further
290 price hikes of INR 15-20/bag across regions in
2 1 21 21 2 1 2 1 21 2 1 2 2 22 22 22 22 22 22 22 22 22
Nov’22.
n - Ju l - u g- ep - ct- o v- ec - an - eb - ar- p r- ay- u n - Ju l - u g- ep - c t-
Source:JuMOFSL, Cement
A Sdealers
O N D J F M A M J A S O
 For Q2FY2023, the cement sector reported a
1600 EBIDTA (Rs /t)
15.1% YoY rise in revenue, with a dip of 50.7%
1400 YoY in EBITDA/tonne and 53.7% YoY in net profit,

1474
led by a steep rise in power & fuel costs and raw

1386
1200

1351
1323

1292
1252

1228
1000 material costs.

1125

1048
1039
1033
1001

976
800

955
 The decline in coal and pet coke prices should

770
600
help average cost reduction of at least INR150/t

620
400
200 in 3QFY23.
0  Cement demand was subdued in Oct’22 due to
9 9 0 0 0 0 1 1 1 1 2 2 2 2 3 3
Y1 FY1 FY2 FY2 FY2 FY2 FY2 FY2 FY2 FY2 FY2 FY2 FY2 FY2 FY2 FY2 festive season, however, the demand is expected
3F 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2
Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q
Source: Axis Capital to revive in the coming months with
Imported Thermal Coal and Pet Coke price improvement in labor availability, govt’s thrust
400 Imported Coal Imported Pet Coke on infrastructure and steady demand from the
350
housing segment.

375

356
353
300

338

331

327
303
250
Trivia

259
249
200
243

236

234
229

208
200

197
150
186

171

165
162
158

155

154
153
150

145

100
50
0 Trv

Source: Axis Capital

Company of the month – JK Lakshmi Cement (JKLC)

Ø JK Lakshmi mainly caters to the north, west & eastern
markets with total capacity of 13.3 MT
Ø The company is planning to add 2.5 MT cement capacity
through its subsidiary unit UCWL at a cost of INR 1650
crore and intends to take its total cement capacity to 30
MT by 2030
Ø JKLC reported a healthy revenue growth of 17%YoY in
Q3FY23 supported by ~17% growth in realization
Ø EBITDA margins declined to 10.6% from 14.5% YoY
Ø PAT was down 23% YoY, 41.6%QoQ to INR 59 crore